A power of attorney is a legal document that allows one person (known as the principal) to authorize another (known as the agent or attorney-in-fact) to act on the person’s behalf. A financial power of attorney allows the agent to make financial decisions while a health care power of attorney authorizes the agent to make decision related to the principal’s healthcare needs.

Powers of attorney can be broad and give the agent the ability to make any and all decisions regarding healthcare or finances. This is known as a general power of attorney. In comparison, a limited power of attorney specifies the types of decisions the agent can make on your behalf. Finally, a durable power of attorney ensures that the power of attorney remains in effect in the event that you later become incapacitated.

In the instance that you become incapacitated and do not have a power of attorney in place for finances or healthcare, your family will have to file for guardianship or conservatorship in order to make decisions on your behalf.

A guardianship is given to a person (the guardian) to make personal decisions for another (known as the ward) through the probate court. The proceeding is generally initiated when a family member files a petition for guardianship with the probate court. A medical examination may be required to establish the mental capacity of the petitioner’s family member. If a judge decides that the person does not have the mental capacity to care for themselves and take care of their personal needs, the judge will appoint a guardian. Unless limited by the court, the guardian will have the same rights as a parent has over minor children. The guardian will be required to report to the court annually.

A conservatorship is also given through the probate court to a person (known as the conservator) to make financial decisions on behalf of another. While the court proceeding is very similar to that of filing for guardianship, in a conservatorship case the judge is determining if the individual can manage their financial affairs. If the court deems the individual unable to handle their finances, the court will appoint someone to act as conservator. Often the same person acts as guardian and conservator. The conservator will have to provide an accounting to the court on an annual basis.

A power of attorney is almost always preferred over a guardianship and conservatorship because of the hassle and expenses of filing with the probate court. By creating a financial and healthcare power of attorney in advance, you will be able to nominate who will look after you in the future and save your family lots of time and money. There is no reason to let the court make decisions about your care; you can make them now by meeting with a qualified elder law attorney.